Despite a softening economy, stagnant wages and rising unemployment this year, there's been one super-powered economic indicator in 2019 for Australia -- our trade surplus. Yesterday's June trade data showed a 2018-19 surplus of $50.3 billion, more than four times the $11.67 billion surplus in 2017-18, powered by a 13% rise in the value of exports to a record $474.3 billion. The June monthly surplus of $8.04 billion easily topped the previous record in May of $6.17 billion.
As much as we'd love to give ourselves a pat on the back -- especially those of us old enough to remember the 1980s when we were excoriated for our persistent trade deficits -- it was mainly thanks to the surge in iron ore prices since last November. Vale's January mine dam disaster in Brazil saw Australian iron ore prices jump 72%, from around US$72 a tonne to US$125 a tonne on July 2. Overall, the Reserve Bank’s monthly Commodity Price Index leapt 21% in Australian dollar terms in the year to July, with the July reading of 131.5 the highest since June 2011.